News Archive - October 2012
Number of UK businesses hits record high - 24.10.2012
The number of businesses in the UK stood at a record high at the start of 2012, official figures from the Department for Business, Innovation and Skills (BIS) have revealed.
The statistics show an increase of 300,000 businesses compared with the 4.5 million recorded at the start of 2011. Of the 4.8 million private sector businesses in operation at the beginning of 2012, 99.9 per cent of them were small and medium sized enterprises.
According to the data, SMEs account for 59.2 per cent of private sector employment and 48.8 per cent of private sector turnover. Commenting on the figures, Business Minister Michael Fallon said:
"Today's figures show that we now have a record number of private sector businesses in the UK. We have always said that private sector is central to healing and rebalancing our economy and this increase is another encouraging sign.
"We know that our entrepreneurs drive growth, so we will continue to do everything we can to help unleash and unlock entrepreneurs' potential. The additional tax relief for angel investment, reforms to employment law, investment in business mentoring and further cuts in red tape are just some of the actions government is taking to create a better business environment."
The statistics show an increase of 300,000 businesses compared with the 4.5 million recorded at the start of 2011. Of the 4.8 million private sector businesses in operation at the beginning of 2012, 99.9 per cent of them were small and medium sized enterprises.
According to the data, SMEs account for 59.2 per cent of private sector employment and 48.8 per cent of private sector turnover. Commenting on the figures, Business Minister Michael Fallon said:
"Today's figures show that we now have a record number of private sector businesses in the UK. We have always said that private sector is central to healing and rebalancing our economy and this increase is another encouraging sign.
"We know that our entrepreneurs drive growth, so we will continue to do everything we can to help unleash and unlock entrepreneurs' potential. The additional tax relief for angel investment, reforms to employment law, investment in business mentoring and further cuts in red tape are just some of the actions government is taking to create a better business environment."
Paper tax return deadline looms - 15.10.2012
The deadline for sending 2011/12 paper tax returns is fast approaching.
HMRC is reminding everyone that the deadline for paper tax returns is Wednesday 31 October 2012. Paper returns received on or after 1 November will result in a £100 penalty, even if there is no tax to pay.
Those unable to submit their paper tax return by the deadline can avoid a late filing penalty by sending their tax return online by 31 January 2013.
Around 10.6 million notices to complete a tax return have been sent by HMRC for the 2011/12 tax year. Since last year there have been new penalties in place for late returns, which could see those filing late pay more than £1,500 in penalties, depending on how late they file.
If you would like help and advice on completing your tax return, please don't hesitate to contact us.
HMRC is reminding everyone that the deadline for paper tax returns is Wednesday 31 October 2012. Paper returns received on or after 1 November will result in a £100 penalty, even if there is no tax to pay.
Those unable to submit their paper tax return by the deadline can avoid a late filing penalty by sending their tax return online by 31 January 2013.
Around 10.6 million notices to complete a tax return have been sent by HMRC for the 2011/12 tax year. Since last year there have been new penalties in place for late returns, which could see those filing late pay more than £1,500 in penalties, depending on how late they file.
If you would like help and advice on completing your tax return, please don't hesitate to contact us.
Freeze business rates or face more empty shops, say retailers - 15.10.2012
A group of retailers are calling on the Government to freeze business rates ahead of September's RPI inflation figure announcement.
In a letter to the Financial Times, 14 retail leaders, including chief executives of members of the British Retail Consortium (BRC), call for the Government to keep business rates as they are during 2013.
Business rates are currently linked to the RPI rate of inflation, which has seen them increase by 4.6 per cent in 2011 and 5.6 per cent in 2012. September's RPI figure is used to set the rates for the following year, but this could add as much as £200 million to the retail sector's bills in 2013.
According to the letter, the retail sector pays the largest share of business rates (28 per cent of the total), and a further rise 'would deal a blow to retailers' ability to invest in stores and create jobs, especially in these tough trading conditions'.
The knock could have a direct impact on unemployment figures, particularly for young people, the BRC claims, saying: "That would mean more empty shops on high streets and fewer employment opportunities, especially for young people."
In addition to a freeze, the letter also calls for a review of the mechanism currently used to set rates, saying: "We urge the Government to recognise that retail has already given more than its fair share to the Exchequer and to freeze business rates in 2013. It should also act on its commitment to review the mechanism by which rates are increased, to ensure a fairer and more sustainable formula for the future."
In a letter to the Financial Times, 14 retail leaders, including chief executives of members of the British Retail Consortium (BRC), call for the Government to keep business rates as they are during 2013.
Business rates are currently linked to the RPI rate of inflation, which has seen them increase by 4.6 per cent in 2011 and 5.6 per cent in 2012. September's RPI figure is used to set the rates for the following year, but this could add as much as £200 million to the retail sector's bills in 2013.
According to the letter, the retail sector pays the largest share of business rates (28 per cent of the total), and a further rise 'would deal a blow to retailers' ability to invest in stores and create jobs, especially in these tough trading conditions'.
The knock could have a direct impact on unemployment figures, particularly for young people, the BRC claims, saying: "That would mean more empty shops on high streets and fewer employment opportunities, especially for young people."
In addition to a freeze, the letter also calls for a review of the mechanism currently used to set rates, saying: "We urge the Government to recognise that retail has already given more than its fair share to the Exchequer and to freeze business rates in 2013. It should also act on its commitment to review the mechanism by which rates are increased, to ensure a fairer and more sustainable formula for the future."
Real Time PAYE awareness campaign launches - 10.10.2012
HM Revenue & Customs (HMRC) has kicked off its Real Time Information (RTI) awareness campaign and will be writing to more than 1.4 million employers over the next month.
RTI is due to start in April 2013, and will change the way that employers report on and send PAYE data to HMRC. By October 2013, all employers and pension providers will have to use RTI, as it is vital for Universal Credit to work.
A pilot of the scheme was launched in April 2012, and participants have been providing details of tax, national insurance and other salary deductions in real time as opposed to at the end of the tax year.
For RTI to work all employers will have to prepare, which is why HMRC is launching its campaign now. Measures that employers will have to take include:
- Cleaning data - for RTI to work, the data held by employers on their employees must be as clean as possible. Information such as name, address and national insurance number must be correct and up to date to ensure that HMRC can
match records correctly and ensure the right amount of deductions are paid.
- Payroll alignment - all employers will have to provide HMRC with an extract of all employees in their PAYE scheme that tax year, regardless of whether they have since left. HMRC will then compare this data with data they already have to ensure records are accurate and up to date.
- Change internal processes - employers may have to change their internal processes to accommodate RTI, including the payroll software used as this will need to be updated for RTI.
Commenting, HMRC's director general, Ruth Owen said: "Don't put it off - April 2013, when Real Time Information becomes a reality, is now less than six months away.
"The letters going out to employers include a useful help sheet, which tells them what to do to get ready for the change. Employers should read that and take action such as speaking to their payroll software provider or payroll service provider and checking their employee data is accurate.
"Employers in the pilot who are already using RTI are telling us how straightforward and easy to use it is once you prepare."
As your accountant we will help you to prepare for RTI, please contact us.
RTI is due to start in April 2013, and will change the way that employers report on and send PAYE data to HMRC. By October 2013, all employers and pension providers will have to use RTI, as it is vital for Universal Credit to work.
A pilot of the scheme was launched in April 2012, and participants have been providing details of tax, national insurance and other salary deductions in real time as opposed to at the end of the tax year.
For RTI to work all employers will have to prepare, which is why HMRC is launching its campaign now. Measures that employers will have to take include:
- Cleaning data - for RTI to work, the data held by employers on their employees must be as clean as possible. Information such as name, address and national insurance number must be correct and up to date to ensure that HMRC can
match records correctly and ensure the right amount of deductions are paid.
- Payroll alignment - all employers will have to provide HMRC with an extract of all employees in their PAYE scheme that tax year, regardless of whether they have since left. HMRC will then compare this data with data they already have to ensure records are accurate and up to date.
- Change internal processes - employers may have to change their internal processes to accommodate RTI, including the payroll software used as this will need to be updated for RTI.
Commenting, HMRC's director general, Ruth Owen said: "Don't put it off - April 2013, when Real Time Information becomes a reality, is now less than six months away.
"The letters going out to employers include a useful help sheet, which tells them what to do to get ready for the change. Employers should read that and take action such as speaking to their payroll software provider or payroll service provider and checking their employee data is accurate.
"Employers in the pilot who are already using RTI are telling us how straightforward and easy to use it is once you prepare."
As your accountant we will help you to prepare for RTI, please contact us.
Default Retirement Age officially ends - 5.10.2012
Employers are no longer able to force older workers to retire once they reach 65 years of age following a gradual phasing out of the Default Retirement Age (DRA).
Older workers will now have more choice about when to stop working, with October 5 marking the latest possible date in which workers aged 65 can be forced to retire.
Before April 2012 employers were entitled to give between six and twelve months notice if forcing retirement, with a possible six months extension in some cases.
The removal of the DRA comes in response to an ageing nation and the financial crisis, both of which have affected people's retirement savings and level of income.
Saga has welcomed the move, which it says should have happened many years ago.
Director general of Saga Dr Ros Altmann said: "The fact is that people are simply not 'old' or 'past it' any more in their sixties and, after all the tremendous advances in healthcare and labour practices, there is no reason why those who want to keep working should be forced out just on the grounds of their age. "
"Such ageist attitudes and discriminatory practices have no place in a modern labour market."
She said that keeping more over 65s economically active would benefit medium term job prospects for the economy and leave more in older pockets to spend on leisure and services.
According to data from Saga, there are now a record number of employees working past the age of 65, with around 870,000 in employment in the final quarter of 2010.
As well as the financial benefits to individuals and the public purse, working later in life can also offer greater social and physical benefits to the individual.
The Government has said that businesses also stand to benefit from the abolishment of DRA and the resulting age diverse workforce. It can also reduce recruitment and training costs, increase productivity, and retain the skills of experienced members of staff.
We are happy to discuss your options on working past your state pension age or your options if you're reaching retirement. Please get in touch to find out more.
Older workers will now have more choice about when to stop working, with October 5 marking the latest possible date in which workers aged 65 can be forced to retire.
Before April 2012 employers were entitled to give between six and twelve months notice if forcing retirement, with a possible six months extension in some cases.
The removal of the DRA comes in response to an ageing nation and the financial crisis, both of which have affected people's retirement savings and level of income.
Saga has welcomed the move, which it says should have happened many years ago.
Director general of Saga Dr Ros Altmann said: "The fact is that people are simply not 'old' or 'past it' any more in their sixties and, after all the tremendous advances in healthcare and labour practices, there is no reason why those who want to keep working should be forced out just on the grounds of their age. "
"Such ageist attitudes and discriminatory practices have no place in a modern labour market."
She said that keeping more over 65s economically active would benefit medium term job prospects for the economy and leave more in older pockets to spend on leisure and services.
According to data from Saga, there are now a record number of employees working past the age of 65, with around 870,000 in employment in the final quarter of 2010.
As well as the financial benefits to individuals and the public purse, working later in life can also offer greater social and physical benefits to the individual.
The Government has said that businesses also stand to benefit from the abolishment of DRA and the resulting age diverse workforce. It can also reduce recruitment and training costs, increase productivity, and retain the skills of experienced members of staff.
We are happy to discuss your options on working past your state pension age or your options if you're reaching retirement. Please get in touch to find out more.
Businesses to pay for their own failed health and safety inspections - 3.10.2012
Under the Government's new fee for intervention (FFI) rules, businesses that are found in 'material breach of health and safety laws will have to pay the Health and Safety Executive's HSE's cost of inspections, investigations and enforcement action at a rate of £124 an hour.
The law comes as the Government aims to shift HSE costs away from the public purse and onto businesses that break the law.
HSE's chief executive Geoffrey Podger said: "The most basic safety mistakes in the workplace can devastate lives and result in real costs to industry. It is right that those who fail to meet their legal obligations should pay HSE's costs rather than the public purse having to do so."
Business groups have criticised the move, with the Forum of Private Business (FPB) believing it could lead to a heavy handed and inconsistent treatment from inspectors eager to recover costs.
The Forum's senior policy adviser Alex Jackman called on the HSE to clarify what it constitutes as a 'material breach', saying that uncertainty would lead to different interpretations by inspectors on a business to business basis.
"Given the importance of restoring trust between regulators and small businesses, threatening them with yet more non-compliance fines is entirely the wrong approach - they need information, support and guidance," he said.
A survey by the FPB in May found that only three per cent of its members agreed that businesses should pay the full cost of the FFI, while 90 per cent believed that recovery costs should be scaled according to the size of business and the seriousness of a breach.
Elsewhere in its survey, FPB members commented that good health and safety practices were useful in terms of reducing staff absences and giving companies a competitive edge, particularly locally amongst businesses such as caterers, garages and manufacturers.
However, members would rather see more information and advice offered by HSE.
Jackman added: "We want every government department to understand the significant financial demands on business at present. There needs to be greater understanding shown by enforcement officers that firms face a number of inspections from multiple agencies across all aspects of their business."
HSE will review the FFI rule after twelve months and three years and the resulting report will be published on its website.
The law comes as the Government aims to shift HSE costs away from the public purse and onto businesses that break the law.
HSE's chief executive Geoffrey Podger said: "The most basic safety mistakes in the workplace can devastate lives and result in real costs to industry. It is right that those who fail to meet their legal obligations should pay HSE's costs rather than the public purse having to do so."
Business groups have criticised the move, with the Forum of Private Business (FPB) believing it could lead to a heavy handed and inconsistent treatment from inspectors eager to recover costs.
The Forum's senior policy adviser Alex Jackman called on the HSE to clarify what it constitutes as a 'material breach', saying that uncertainty would lead to different interpretations by inspectors on a business to business basis.
"Given the importance of restoring trust between regulators and small businesses, threatening them with yet more non-compliance fines is entirely the wrong approach - they need information, support and guidance," he said.
A survey by the FPB in May found that only three per cent of its members agreed that businesses should pay the full cost of the FFI, while 90 per cent believed that recovery costs should be scaled according to the size of business and the seriousness of a breach.
Elsewhere in its survey, FPB members commented that good health and safety practices were useful in terms of reducing staff absences and giving companies a competitive edge, particularly locally amongst businesses such as caterers, garages and manufacturers.
However, members would rather see more information and advice offered by HSE.
Jackman added: "We want every government department to understand the significant financial demands on business at present. There needs to be greater understanding shown by enforcement officers that firms face a number of inspections from multiple agencies across all aspects of their business."
HSE will review the FFI rule after twelve months and three years and the resulting report will be published on its website.
Business group calls for speedier end to cheque - 2.10.2012
Plans to axe the cheque by 2018 should be brought forward to reduce the number of businesses struggling with late payment, the British Chambers of Commerce (BCC) has said.
The comment follows a survey which questioned around 5,000 businesses and found that the majority (85 per cent) are paid via BACs bank transfers, with 95 per cent of firms reporting it as their preferred method of payment.
Conversely, two thirds of businesses are paid by cheque yet only a fifth prefer being paid in this way.
Unlike bank transfers which are usually processed instantaneously, delays in transfers as well as 'bounced' cheques can cause further delay for businesses already receiving delayed invoice payments.
The UK Payments Council last year decided to phase out the use of cheques by 2018 after lobbying from business groups, but the BCC argues it should be brought forward.
"While many businesses still use this method of payment, it can have negative effects on other businesses' cashflow," the BCC said.
"However any changes should only happen if businesses are not financially disadvantaged by the extra fees that can come with additional forms of payment such as internet banking transfers."
Cashflow issues stemming from late payment is a major problem particularly for smaller businesses. Yet over a third of businesses admit to late payment themselves due to the 'domino effect' of cashflow issues; a third said they could not pay suppliers until they had received payment from their own customers.
The BCC's survey found that 94 per cent of businesses have been paid late, with nearly one in four (24 per cent) saying that 40 per cent of their bills are now paid late. A third of businesses reported that most customers were paying late after the down turn in 2008.
Elsewhere, research from the BACs Payment Schemes Ltd, the company behind Direct Debit, said that a million businesses are suffering from late payment of bills, with a collective debt reaching £36.4 billion.
As well as calling for an accelerated end to cheques, the BCC said a kitemark scheme to asses and acknowledge prompt payers should be brought in, in addition to electronic invoicing.
The comment follows a survey which questioned around 5,000 businesses and found that the majority (85 per cent) are paid via BACs bank transfers, with 95 per cent of firms reporting it as their preferred method of payment.
Conversely, two thirds of businesses are paid by cheque yet only a fifth prefer being paid in this way.
Unlike bank transfers which are usually processed instantaneously, delays in transfers as well as 'bounced' cheques can cause further delay for businesses already receiving delayed invoice payments.
The UK Payments Council last year decided to phase out the use of cheques by 2018 after lobbying from business groups, but the BCC argues it should be brought forward.
"While many businesses still use this method of payment, it can have negative effects on other businesses' cashflow," the BCC said.
"However any changes should only happen if businesses are not financially disadvantaged by the extra fees that can come with additional forms of payment such as internet banking transfers."
Cashflow issues stemming from late payment is a major problem particularly for smaller businesses. Yet over a third of businesses admit to late payment themselves due to the 'domino effect' of cashflow issues; a third said they could not pay suppliers until they had received payment from their own customers.
The BCC's survey found that 94 per cent of businesses have been paid late, with nearly one in four (24 per cent) saying that 40 per cent of their bills are now paid late. A third of businesses reported that most customers were paying late after the down turn in 2008.
Elsewhere, research from the BACs Payment Schemes Ltd, the company behind Direct Debit, said that a million businesses are suffering from late payment of bills, with a collective debt reaching £36.4 billion.
As well as calling for an accelerated end to cheques, the BCC said a kitemark scheme to asses and acknowledge prompt payers should be brought in, in addition to electronic invoicing.
